Holding LG Electronics India since IPO? Morgan Stanley sees room for upside

Shares of LG Electronics India Ltd have struggled to sustain their strong debut after the company’s blockbuster listing in October last year.

The stock listed on October 14, 2025, at Rs 1,710.10 on the National Stock Exchange of India and Rs 1,715 on the Bombay Stock Exchange. The listing represented a premium of nearly 50 per cent over the IPO issue price of Rs 1,140.

However, the stock soon came under sustained selling pressure. It fell to around Rs 1,300, which marked its 52-week low. From the listing level of Rs 1,710, this translates into a decline of about 24 per cent.

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The stock has recovered partly since then and is currently trading around the Rs 1,500 level. Still, investors who bought the shares immediately after listing remain under water as the price is yet to reclaim its debut level.

Morgan Stanley maintains positive view

Despite the volatility, brokerage firm Morgan Stanley remains positive on the stock.

The brokerage has maintained its overweight rating with a target price of Rs 1,726, implying potential upside from current levels.

Morgan Stanley said demand trends across key consumer durable segments are improving.

Air conditioners: Demand is picking up in North and West India as temperatures rise. Summer in the South is delayed by 7–10 days.

Televisions: Sales may get a boost from ongoing cricket events.

Refrigerators and washing machines: The brokerage sees better year-on-year demand, with premium products gaining traction.

For room air conditioners, the brokerage expects growth in the March quarter and sees the category delivering double-digit CAGR over the long term.

On profitability, Morgan Stanley expects margins to recover and approach FY25 levels by FY27.

Q3 earnings show pressure on margins

The company’s recent quarterly results highlight why the stock has been under pressure.

LG Electronics India reported a net profit of Rs 89.6 crore in Q3, down 61.6 per cent from Rs 233.4 crore in the same period last year.

Revenue declined 6.4 per cent year-on-year to Rs 4,114.3 crore, compared with Rs 4,395.5 crore a year earlier. The company said demand remained muted in the consumer durables segment after the festive season.

EBITDA fell 42.6 per cent to Rs 195.7 crore, while EBITDA margin narrowed to 4.8 per cent from 7.8 per cent a year ago.

The company attributed the margin pressure to weaker operating leverage and higher raw material costs, particularly copper and aluminium. Currency fluctuations also weighed on profitability.

Segment performance

The Home Appliances (H&A) segment reported revenue of Rs 2,788 crore in Q3 FY26, down from Rs 3,091 crore in the year-ago period as demand softened after Diwali.

The company said it avoided aggressive price cuts to protect long-term profitability and maintained higher average selling prices through premium products.

Meanwhile, the Home Entertainment (HE) segment remained stable. Revenue came in at Rs 1,326 crore, slightly higher than Rs 1,305 crore last year.

LG said the reduction in GST rates supported initial demand, and the company gained market share in the offline television market.

Why it matters for investors

The stock has recovered from its 52-week low but remains below the listing price. Brokerages are betting on summer demand, premium product growth and margin recovery to drive the next leg of upside. However, weak near-term earnings and demand volatility continue to keep the stock range-bound.

LG Electronics India share price

On Monday, LG Electronics India shares closed at Rs 1,530.10, down Rs 49.60 or 3.14 per cent.